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Province should save 401 Richmond: Editorial

Despite being just the sort of creative hub governments often claim to covet, the project may soon be undone by a backwards property-tax policy that cares nothing for character.

Tax increases threaten 401 Richmond, an altruistic holdout of low rent and cultural activity in a pocket of the city long-ago gentrified by condos and big-brand retail. (J.P. MOCZULSKI / For The Toronto Star)

Wed., Dec. 21, 2016

No one wins when the creative enterprises that give a city its character are paid back by being priced out of their neighbourhoods. So it is with 401 Richmond, a heritage building in the heart of Toronto that has served for 23 years as a haven for artists and cultural organizations.

Despite being just the sort of creative hub governments often claim to covet, the project may soon be undone by a backwards property-tax policy that cares nothing for character.

Since 1994, Urbanspace, the company that owns the five-storey former factory, has offered reduced rents to artists and creative entrepreneurs who couldn’t otherwise afford to set up shop downtown.

The idea was that by restoring the building and shielding its tenants from the fluctuations of the market, the company might create an artistic and intellectual hub that would contribute to the revitalization of the core and the cultural life of the city. It did just that.

One would think the province would want to reward Urbanspace for its efforts. Instead, the company is being discouraged.

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The owners of 401 Richmond recently learned that the building’s property tax bill will jump by 85 per cent next year. By 2020, it will have nearly tripled. Urbanspace can no longer absorb the rising costs – nor likely can many of its tenants. “When I saw our assessment, I thought, ‘That’s it — the game’s over,’” said Margie Zeidler, the company’s owner.

That would be a shame. Many of the organizations and artists who have found a home in the building – from non-profit art galleries and small cultural magazines to anti-poverty programs and environmental groups – may not survive the consequences undiminished if at all.

Of course the city has revenue needs, but the property-tax system seems designed to displace the small unique thing in favour of the big generic one. The trouble is the way property value is assessed for tax purposes, according only to so-called “highest and best use.” That means 401 Richmond pays taxes not based on its current value, but on the value of the sort of highrise condo that might be expected to take its place.

The purpose of the “highest and best use” measure is not simply to enrich the province, but also to encourage landowners to make the most of their lots by, say, building needed housing or new commercial space.

But the approach punishes those who, for instance, want to preserve historic architecture, rather than see it repurposed as a condo tower, or run a cultural hub not driven primarily by economics. Venues like 401 Richmond or the more than 300 other heritage buildings in the King-Spadina neighbourhood alone are part of our city’s history and character. But, as councillor Joe Cressy points out, property-tax policy “says that most of those would be better used as condo towers.”

That makes sense neither culturally nor economically. A city’s vitality in the post-industrial age depends in large part on the strength of its arts and culture sectors. The Toronto-based social scientist Richard Florida and others have made a compelling case that cultural richness not only improves quality of life, but also attracts the business, investment and creative talent that a 21st-century city needs to flourish.

It would be perverse for the province not to protect what has emerged at 401 Richmond, a cultural hub of the sort policymakers should be looking to encourage, not destroy. Such places are key to a city’s growth and essential to its spirit; the province should act now, before more glass towers pop up in their place.

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